China’s Growing Influence in Southeast Asia - Monetary Policy and Equity Markets

Anders Johansson

No 2010-16, Working Paper Series from Stockholm School of Economics, China Economic Research Center

Abstract: We use structural VAR models with short-run restrictions to analyze the potential transmission of China’s monetary policy shocks to equity markets in Southeast Asia. Our results show that several of the markets in the region are influenced by China’s monetary policy, even though the effect is modest. The impact of a monetary expansion in China is significant and positive for four of the five Southeast Asian equity markets, indicating an increase in demand for goods and services in both China and abroad, which in turn shows up in the foreign equity market. The results provide evidence of China’s growing influence in Southeast Asia and its financial markets. The transmission effect is still quite small, but can be expected to increase if the current trends of deepening economic integration between China and Southeast Asia and a maturing Chinese central bank continue.

Keywords: Monetary policy; stock market; structural vector autoregressive model; monetary transmission; China; Southeast Asia (search for similar items in EconPapers)
JEL-codes: C32 E44 E52 F42 G10 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2010-05-01
New Economics Papers: this item is included in nep-ifn, nep-mon and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://swopec.hhs.se/hacerc/papers/hacerc2010-016.pdf (application/pdf)

Related works:
Journal Article: China’s Growing Influence in Southeast Asia – Monetary Policy and Equity Markets (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:hacerc:2010-016

Access Statistics for this paper

More papers in Working Paper Series from Stockholm School of Economics, China Economic Research Center China Economic Research Center, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Malin Nilsson ( this e-mail address is bad, please contact ).